Advertising with Artificial Intelligence: Pros, Cons, Tips, and Examples

Although the risks associated with using AI in marketing are significant, they can be avoided with careful planning, training, and supervision. Let’s look at the pros and cons of using Artificial Intelligence in advertising.

Advantages of artificial intelligence in advertising

Here are some advantages of using artificial intelligence in advertising.

Effective ad targeting through data

In advertising, data can predict consumer behavior to create more effective targeted ads. Forbes reported that the combination of AI and Big Data can automate “almost 80% of all physical work, 70% of data processing, and 64% of data collection tasks.”

Big Data is a term for the large amount of new data available stemming from the growth of digital technology. It is also worth noting that 72% of marketing and business professionals agree that AI tools can help them extract insights from data they otherwise wouldn’t be able to find, according to our AI State survey.

Reach more customers

Artificial intelligence can help your brand quickly assess what works and what doesn’t in its advertising campaigns. For example, Coca-Cola uses artificial intelligence algorithms to analyze when, where, and how consumers talk about the brand on social media.

Specifically, the company studied 120,000 pieces of social media content to understand the demographics and behaviors of customers and users discussing its products. As a result, the brand can tailor its content to meet consumer needs and expand its reach.

Save time and money

In a recent experiment mentioned by HubSpot CMO Kipp Bodnar in an episode of Marketing Against the Grain, using artificial intelligence to design ads for subscriber growth reduced the cost of acquiring leads by 300%.

And that’s not the only way artificial intelligence can be used to save time and money in advertising. Naturally, one of the biggest appeals of AI is its ability to work and generate results quickly.

Artificial intelligence can quickly collect, analyze, and sort large amounts of data. It can then use its findings to spot trends, enabling marketers to make informed advertising decisions.

This can also save your company money on advertising by eliminating guesswork and quickly identifying opportunities most likely to generate revenue.

Cons of artificial intelligence in advertising

Here are some challenges brands may face when using artificial intelligence in advertising.

Possible data inaccuracies

The results generated by artificial intelligence are only effective if the data input is accurate. The data must represent all aspects of customers, their behavior, and their journey.

Therefore, companies need to invest in ways to verify the accuracy of the data entered into AI models to ensure their effectiveness.

Lack of creativity

Artificial intelligence can be an excellent tool for collecting data to inform advertising campaigns; however, humans still need to brainstorm creative ad content that generates buzz.

For example, consumers often gravitate toward social media advertising that displays brand values and how they align with their own. Fun, trendy, and relatable ads are also popular among audiences. Right now, only humans can promote ad content that is relatable and moving. An advertising campaign that relies too much on artificial intelligence can result in dull and disconnected ads.

However, it’s important to note that while AI tools can’t lead creative campaigns, they can still be useful in the creative process.

Data privacy

As mentioned before, artificial intelligence can collect data to create more personalized ads. However, there is also the concern that AI algorithms and models may inadvertently collect sensitive consumer information.

Companies leveraging artificial intelligence to collect data for advertising will need to mitigate the risk by deciding which consumer information to protect and how.

7 examples of AI advertising

Here are some companies that have successfully leveraged artificial intelligence in their advertising campaigns.

1. Whole Foods

In 2021, Whole Foods opened several Just Walk Out stores in the United States, allowing customers to pick up their items and leave without stopping at the checkout. Instead, items are charged to the customer using AI. Artificial intelligence purchase information can help identify patterns and predict future behaviors. The insights allow Whole Foods to send personalized messages to customers.

For example, if a customer regularly buys pasta sauce, basil, and pasta, Whole Foods might send promotional codes and discounts for other Italian ingredients and foods.

What I like: Just Walk Out stores create a simple customer experience for shoppers, while also collecting useful information that can help serve them better in the future.

2. Buzzfeed

The media company Buzzfeed uses OpenAI to provide consumers with personalized content at scale that would not be possible without automation. Specifically, Buzzfeed’s CEO, Jonah Peretti, said that artificial intelligence will help “enhance the quiz experience, inform our brainstorming, and personalize our content for our audience.”

Buzzfeed is not looking to replace its writers with artificial intelligence. Instead, writers and creators are collaborating with the site’s AI creative assistant, “Buzzy the Robot.”

3. Best Western

Best Western partnered with IBM Watson Advertising to create AI-powered ads to reach and engage consumers who are actively planning to travel during peak holiday weekends. IBM’s AI tool, Conversations, was used by Best Western because travel is a personal experience and the tool could offer personalized travel recommendations.

According to IBM, the device was “trained on Best Western’s information and used natural language processing to allow for 1:1 dialogue to deliver a unique travel recommendation to each user.”

The conversations provided real-time advice, tips, and inspiration to travelers, allowing them to prepare for upcoming trips and interact in an innovative way with Best Western. According to IBM, the ads resulted in a 48% increase in visits to Best Western Hotel and Resort locations.

What I like: the ads were not only visually appealing to entice consumers to click. They also provided practical advice and usefulness to customers along with a personalized experience.

4. Coca-Cola

The beverage company launched its own AI platform created by OpenAI and Bain & Company exclusively for the brand. The platform is called “Create Real Magic” and combines GPT-4 and DALL-E. GPT-4 generates human-like text from search engine queries and DALL-E converts text prompts into images.

According to Hubspot’s survey, 44% of marketers use visual AI tools like DALL-E. By combining these programs, Coca-Cola created a campaign where fans could create their own digital artwork based on elements of the brand, such as the iconic bottle and the script logo. Participants could then download their creations and submit them to appear on digital billboards in Times Square in New York and Piccadilly Circus in London.

Pro tip: when you leverage artificial intelligence in your advertising, look for opportunities to involve your consumers in the creative process.

5. Chase

Chase Bank has a 5-year partnership with Persado, a New York-based company that applies artificial intelligence to creative marketing. Chase Bank uses Persado’s machine learning solutions to further humanize the company’s marketing copy.

For example, a Chase digital ad said, “Access cash from your home equity.” Persado’s version said, “It’s true: you can unlock cash from your home equity.” Persado’s version was more successful with customers.

Pro tip: while some AI solutions can write excellent marketing copy, you should still rely on experienced writers and copy editors to review AI-generated content to ensure the copy is accurate and aligned with your brand voice.

6. Dept and Hello Monday

The digital agencies Dept and Hello Monday teamed up to create an AI-based advertising campaign using empty storefronts.

The campaigns involved an AI “Shoe Mirror” that transforms empty stores into interactive revenue-generating ads. The Shoe Mirror appears on vacant storefronts and analyzes the outfits of passersby to find shoes that match their attire. The mirror then “places” the shoes on their feet via augmented reality. Additionally, the shoe mirror provides a QR code that allows passersby to purchase the shoes directly from the display.

What I like: this AI-powered advertisement is personalized and generates revenue. It doesn’t make consumers feel like they’re being blatantly advertised to. Instead, it feels like it helps consumers by finding items that complement their outfit.

7. Heinz

Heinz partnered with Rethink Ideas, a creative agency, to create a series of AI-generated advertising images. The campaign began when the Rethink Ideas team started experimenting with the AI image generator DALL-E 2 and noticed that prompts related to ketchup produced images that looked almost exactly like Heinz ketchup.

The agency then asked consumers to share their own AI prompts for ketchup images. The best prompts were featured on social media and in print ads.

What I like: this use of artificial intelligence allows consumers to have fun and participate in the creative process. Additionally, it is a clever way to show how well-known and trusted Heinz is among consumers. The brand is so famous that AI “immediately thinks” of Heinz when asked about ketchup. Artificial intelligence can be a powerful tool that offers brands broad opportunities to find innovative ways to reach their audience.

From image generation to copywriting to data gathering, there are many ways AI can be implemented to personalize the customer experience and boost revenue. Now that you know the pros and cons of AI and how you can use it, you’re ready to decide if and how AI can move your brand forward.

From hubspot